GAO Bid Protest Annual Report to Congress for Fiscal Year 2013 (GAO-14-276SP)

By: Bryant Le

The Government Accountability Office (GAO) annually reports to Congress a summary of its bid protest activity. Per the requirements of the Competition in Contracting Act (CICA), the GAO must report each instance where a Government agency did not fully implement a recommendation made by the GAO in connection with a bid protest decision.

In its report for FY 2013 (GAO-14-276SP), the GAO discloses data regarding bid protest filings and, for the first time, the most prevalent grounds for the GAO to sustain protests. Below is a chart of bid protest statistics for the previous two fiscal years and a summary of the FY 2013 report.

FY 2013

FY 2012

Cases Filed 2,249 (down 2%) 2,475 (up 5%)
Cases Closed 2,538 2,495
Merit (Sustain + Deny) Decisions 509 570
Number of Sustains 87 106
Sustain Rate 17% 19%
Effectiveness Rate 43% 42%
ADR (cases used) 145 106
ADR Success Rate 86% 80%
Hearings 3.36% (31 cases) 6.17% (56 cases)

Most Prevalent Grounds for Sustaining Protests

For FY 2013, Congress implemented the requirement for the GAO to report the most prevalent grounds for sustaining protests during the preceding year. Accordingly, for the first time, the GAO disclosed this information in its annual report. In FY 2013, the GAO sustained 87 of 509 (17 percent) protests that went to decision. The most prevalent basis for the sustained protest decisions were:

  1. Failure to follow the solicitation evaluation criteria
  2. Inadequate documentation of the record
  3. Unequal treatment of offerors
  4. Unreasonable price or cost evaluation

Not surprisingly, the aforementioned bases are procedural in nature and relatively less subjective (as compared to sustaining a protest on a technical evaluation basis). However, the GAO notes that agencies took voluntary corrective action for “a significant number of protests” filed with the GAO in response to protests. This is a positive sign for both contractors and the U.S. Government, as it reflects the effectiveness of the protest system in providing resolution without having the parties endure a protest process all the way through to a GAO decision.

Agency Did Not Fully Implement GAO Decision

In its report, the GAO summarized two instances where an agency did not fully implement the office’s recommendation.One case involved the Department of Housing and Urban Development (HUD). Specifically, the GAO recommended HUD cancel its notice of funding availability (NOFA) instrument, which would result in the issuance of a cooperative agreement to solicit contract administration services and issue an instrument that would instead result in a contract award. Referring to the Federal Grant and Cooperative Agreements Act (FGCAA), the GAO contended that the solicited contract administration services solely and directly benefit HUD (i.e., the U.S. Government) and accordingly, HUD should use a procurement contract. Another instance involved the Department of Veterans Affairs (VA). The VA’s use of the General Service Administration (GSA) Federal Supply Schedule (FSS) procedures without considering whether “two or more service-disabled veteran-owned small businesses or veteran-owned small business concerns were capable of meeting the agency’s requirements at a reasonable price” conflicted with the Veterans Benefits, Health Care, and Information Technology Act of 2006.

Not Facilitating Decision within 100 Days of Protest Filing

The CICA also requires the GAO to report “each instance in which a final decision in a protest was not rendered within 100 days after the date the protest [was] submitted to the Comptroller General.” The current report is silent on this reporting requirement, which indicates that no final decision was rendered more than 100 days after the submission of the protest.

Decline in Number of Protests Filed

The significant number of voluntary corrective actions is a notable statistic to ponder when analyzing the decline in the number of protests filed with the GAO during FY 2013, albeit a small percentage decline (2 percent). As a point of contrast, the previous four fiscal years had year-over-year increases in bid protests filed.

In a recent interview with Federal News Radio, Dan Gordon, the associate dean for Government Procurement Law at George Washington University Law School, stated that “the effectiveness rate (considers voluntary corrective actions), which increased by 1% relative to the previous three fiscal years, may help explain the decline in the number of protests filed.” Though anecdotal, Gordon poses a possibility that the decline in cases filed may be a result of voluntary corrective actions where the case does not go through the full protest process to a GAO sustain/deny decision. Therefore, the GAO dismissed the protest; yet the protester does not ultimately receive the award. Gordon is researching “what happens to contractors when the agency agrees to take corrective action instead of going through the bid protest process.” He expects to finalize his research at some point this year. It will be interesting to see his results and whether the trend for FY 2014 year will be consistent.

The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.